Correlation Between Shanghai Broadband and Xiangyang Automobile
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By analyzing existing cross correlation between Shanghai Broadband Technology and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on Shanghai Broadband and Xiangyang Automobile and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shanghai Broadband with a short position of Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Broadband and Xiangyang Automobile.
Diversification Opportunities for Shanghai Broadband and Xiangyang Automobile
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Xiangyang is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Broadband Technology and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile and Shanghai Broadband is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shanghai Broadband Technology are associated (or correlated) with Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of Shanghai Broadband i.e., Shanghai Broadband and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between Shanghai Broadband and Xiangyang Automobile
Assuming the 90 days trading horizon Shanghai Broadband Technology is expected to generate 0.69 times more return on investment than Xiangyang Automobile. However, Shanghai Broadband Technology is 1.45 times less risky than Xiangyang Automobile. It trades about -0.24 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about -0.22 per unit of risk. If you would invest 385.00 in Shanghai Broadband Technology on October 12, 2024 and sell it today you would lose (68.00) from holding Shanghai Broadband Technology or give up 17.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Broadband Technology vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| Shanghai Broadband |
| Xiangyang Automobile |
Shanghai Broadband and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Broadband and Xiangyang Automobile
The main advantage of trading using opposite Shanghai Broadband and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Broadband position performs unexpectedly, Xiangyang Automobile can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile's long position.| Shanghai Broadband vs. Soyea Technology Co | Shanghai Broadband vs. Dazhong Transportation Group | Shanghai Broadband vs. Eastroc Beverage Group | Shanghai Broadband vs. Smartgiant Technology Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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